Cathie Wood can’t seem to get enough of Ginkgo Bioworks (NYSE:DNA). Running ARK Invest, Wood has acquired more than 250,000 shares of DNA stock. The Boston-based biotechnology company finished trading at $3.31 per share on Oct. 5.
Wood has been buying DNA stock through her various exchange-traded funds (ETFs) which focus on companies engaged in disruptive technologies. Year-to-date (YTD), Wood’s flagship ARK Innovation ETF (NYSEARCA:ARKK) is down 58% and trading near $40 per share.
Here’s what investors should know about Ginkgo and Wood’s share purchases moving forward.
What’s Happening With DNA Stock?
Wood’s interest in Ginkgo Bioworks comes after the company made a series of strategic acquisitions. On Oct. 4, Ginkgo announced that it was acquiring biotech company Circularis to help bolster its cell and gene-therapy capabilities. At the same time, Ginkgo also acquired Altar, a French biotech name that has developed a “proprietary adaptive evolution platform.” Financial terms for either of these deals were not disclosed.
Founded in 2009 by several scientists at the Massachusetts Institute of Technology (MIT), Ginkgo is engaged in genetic engineering that produces bacteria which can be used in industrial applications. The company has been valued at as much as $4.2 billion. However, DNA stock has declined 61% this year and fallen 69% since its market debut in 2021 via a reverse merger with a special purpose acquisition company (SPAC).
Why It Matters
Cathie Wood’s stock picks are carefully scrutinized on Wall Street. Her flagship ARK Innovation fund has imploded this year after running up more than 300% between March 2020 and February 2021. In recent months, Wood has also been criticized for continuing to hold onto — and in some cases double down on — stocks that have collapsed this year. These include names like Roblox (NYSE:RBLX) and Spotify (NYSE:SPOT).
Wood has responded to the criticism by saying that innovation is on sale as markets trend lower. However, it’s interesting that she is buying shares of DNA stock. Typically, Wood focuses on larger tech companies with more established products in the marketplace. One of her largest holdings is electric vehicle (EV) maker Tesla (NASDAQ:TSLA), another stock she has continued to buy in 2022. Cathie Wood’s interest in Ginkgo is bringing the company and DNA stock some valuable attention.
It’s not clear how much of an impact Wood’s purchase of DNA stock is having on the share price. Shares have climbed slightly over the past five trading sessions, but that could be due to the company’s recent acquisitions. For the year, DNA stock is still down more than 60%. Investors should proceed with caution.
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On the date of publication, Joel Baglole did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
